Profit and higher education By Anurag Behar

Pick up any list of the world’s best universities and go through those names. You can go through the top 500—not just top 10 or 20. You will not find a single for-profit university.

It’s useful to remind ourselves of what most of us already know: the Harvard and Yales of the world are all not-for-profit organizations. They won’t survive a year in the absence of their large endowments, and substantial annual grants.

The point is simple, high quality higher education is not and cannot be a for-profit enterprise. This is not an ideological issue; it is merely an economic implication of what is required to have high-quality higher education. Three of these requirements are: deep and broad-based research, a good student faculty ratio and a multidisciplinary faculty ranging from humanities to applied domains. There are other requirements, but these three in themselves are sufficient explanations for the not-for-profit nature of high quality higher education enterprises.

I wrote about this issue in these columns about a year ago. What has prompted me to write again is the news that I read in Mint and other dailies. The Planning Commission has suggested the country permit establishment of institutes of higher learning that can be run for profit. These reports quoted a Planning Commission approach paper, “The not-for-profit tag in higher education sector should perhaps be re-examined in a more pragmatic manner so as to ensure quality without losing focus on expansion and equity.”

In the related reports, I found two bits of welcome pragmatism from the Planning Commission. The first was the candid admission of the open secret that even now most private educational institutions are out to make a profit, although the current law prohibits them. The second was that private capital will not come to the education sector unless profit making is allowed, bar the rare bit of philanthropic capital.

That’s where the pragmatism stops. Pragmatism, not ideology, should have also led them to stating that “since private capital, will (largely) not come without profit motive, it cannot solve the problem of quality and equity”. Instead the approach paper seems to be constructing a new delusion that private for-profit capital will help in improving quality and equity in higher education. Admittedly I am drawing only on these reports, and so may have misread the real drift of the commission. Though it doesn’t seem likely, given the statements that I have read, but I would be happy if I am proved wrong. That’s because this serious issue of the abysmal quality of our higher education is being side-stepped by deploying such an artifice.

You cannot fix someone’s cardiac fitness by recommending a hair transplant. That’s what this artifice amounts to. To address our problems in education, both school and higher education, there are just two ways ahead and both are needed. For cardiac fitness you have to eat right and exercise, there is no other way out. Similarly for our problems of quality and equity in education, the government has to invest more money and improve its performance.

Implementing these two, however, is very very difficult. The Planning Commission has good reasons to look for other paths. Getting more money for education is only possible if wasteful expenditure is controlled and economically distorting subsidies are reduced. Only through slow grinding changes on the ground can improvement happen in the government education system. This will not happen as a result of some policy or plan change.

Both the issues, of more money for education, and improving the government’s performance, face resistance from entrenched political interests, massive execution challenges of scale and complexity and general apathy.

If you were to cut free electricity supply to agriculture, you will have a mass rebellion on your hands. Which politically and socially influential group is willing to take up cudgels for education? None; and that is the reality.

Governments and other bodies, have continually made efforts (with limited effect) to improve the school system. There have been almost no such efforts made in higher education. The only steps being the setting up of new IITs, NITs, IIMs, AIIMS, etc.

Creating this additional capacity is important, but even more important is improving the governance and functioning of the 500-odd existing universities and their affiliated colleges. This is not just a practical issue of improving the impact of what is already being spent, it also involves the larger problem that unless we improve the functioning of these institutions, we will continue to churn uneducated people whom we call graduates by the millions. The problem is severe in the basic undergraduate courses in sciences and humanities, which are almost completely ignored by any initiative for improvement and fresh capacity creation.

The Planning Commission can get all the wise advisers, and can think through this issue far better than most of us can, if only it would not get caught in the blind belief that “for profit” education can help in improve quality and equity of higher education.